The Clean Power Plan is only one factor in potential growth of renewables. As I pointed out in earlier blogs, subsidies have a big impact. The two important ones at the federal level are the Investment Tax Credit and the Production Tax Credit. The estimate in the graph below, modified from a National Energy Renewable Laboratory report which modeled the effects of the five-year extension passed in 2015, shows the difference that the extension of these credits makes. Added renewable generation capacity due to the credits is about 50 gigawatts in just five years, or about 25% of currently installed capacity. The growth rate with the credits is about twice the rate without.

Continued differences could be expected if subsidies are extended beyond 2020. Trump has not specifically threatened these credits, although he has promised to “cancel billions in climate change spending.”

National Renewable Energy Laboratory

Assuming the credits for renewables are not extended beyond 2020, natural gas prices, which will also be affected by Trump’s policies, will be a more significant factor. In the National Energy Laboratory’s analysis, both the extension and no extension scenarios show slower renewables growth when gas prices are low. In the extension scenario, renewable capacity in 2030 is about 100 gigawatts lower in the Low Gas Price case than in the Base Gas Price case; in the no extension scenario it is about 125 gigawatts lower.

The 2020 gas price in the low price scenario was about $3 per thousand cubic feet, significantly higher than the current price. If government policies favoring the industry result in continued low natural gas prices, it would further suppress renewables growth.

Arguments for the continued rapid growth of renewables include the possibility that the Clean Power Plan, Investment Tax Credit and Production Tax Credit will not be repealed, that state mandates and subsidies will continue and that the continuing cost decrease of renewables will make them more competitive. The latter two factors will almost certainly continue, so the important differences will be in the federal credits and fossil fuel policies.

It is impossible to tell which policies will be implemented at the national level. The Investment Tax Credit and Production Tax Credit may stay in force because they are favored by many Republicans in states that benefit from these credits. Policies favoring the oil industry and weakening or abandoning the Clean Power Plan seem likely.

It looks virtually certain that renewables growth will continue, but at a much-reduced pace.

Earl J. Ritchie is a retired energy executive and teaches a course on the oil and gas industry at the University of Houston. He has 35 years’ experience in the industry. He started as a geophysicist with Mobil Oil and subsequently worked in a variety of management and technical positions with several independent exploration and production companies. Ritchie retired as Vice President and General Manager of the offshore division of EOG Resources in 2007. Prior to his experience in the oil industry, he served at the US Air Force Special Weapons Center, providing geologic and geophysical support to nuclear research activities.

UH Energy is the University of Houston’s hub for energy education, research and technology incubation, working to shape the energy future and forge new business approaches in the energy industry.